Take Me to the River
Smart Business, May 2001
by Thomas Claburn
For dot-coms adrift in red ink, reaching profitability remains a dream deferred. Digital River is no exception, but given its buoyant Q4 2000 revenue—$10.1 million, up 82 percent from Q4 1999—the company sees itself making landfall (and money) toward the end of 2001.
How? By keeping other businesses afloat. That's what a commerce service provider (not to be confused with an application service provider) does. CEO Joel Ronning explains, "An ASP takes someone else's product and rents that out. We don't do that. We own our technology and we focus on one specific area. We don't run a store, we run our clients' stores."
So how does Digital River manage more than 8,000 different e-commerce efforts around the globe? By putting all its eggs in one technological basket. Ronning says the company's one-platform-fits-all infrastructure runs "on Oracle, Sun, and our own internally developed technology. Having everything run on that one massive infrastructure allows us to really concentrate on supporting one large framework."
Ronning says Digital River can manage its costs better than its competitors, but he notes the technology isn't what matters. "The real mystery of this business is not the technology," he says. "The real issue is how do you gather customer loyalty, return purchases, 'deal with' increasing average order size?" The real issue is results. And as Ronning tells it, Digital River delivers. "We are extremely focused on our clients' ROI," he says. For example, "we've helped Autodesk build its business three times over during the past year and a half. And that is not uncommon."
Actually, it is.
